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Report No. 176

2.4.8 Section 8(3)

Whether parallel arbitrations under section 8 and section 11 are permitted by section 8 (3): Sub-section (3) of section 8 states that notwithstanding that an application has been made under section (1) of that section and that the issues pending before the judicial authority, an arbitration may be commenced or continued or an arbitral award made.

There have been certain cases where even after the judicial authority has referred the matter to arbitration or has referred to refer the dispute to arbitrators, the arbitrators appointed by one of the parties earlier, are continuing to deal with the disputes. It is proposed to rectify this problem by adding a provision below sub-section (3) of section 8 to the effect that the decision of the judicial authority shall be binding on the parties and that the arbitrators otherwise appointed have to cease to perform their functions.

Primacy has to be given to the judicial authority's order, i.e., passed after hearing the parties, including the party who has already appointed an arbitral tribunal. Of course, in case the judicial authority holds that there is no arbitration agreement or dispute that the agreement is null and void etc., the arbitration which has already commenced, has to terminate. The above aspects are provided by way of a proviso to sec. 8(3). (Proposed section 8 (6) is also extracted here but it is dealt with separately in para 2.7.1)

The Arbitration and Conciliation (Amendment) Bill, 2001 Back

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